Tax plan by Youngkin finds little support

Va. House and Senate budget proposals split over stadium advocacy

RICHMOND — The House and Senate appropriation committees released their respective state budget proposals Sunday, which reject much of the tax plan proposed by Republican Gov. Glenn Youngkin and instead commit additional investments to schools and raise teacher and state employee salaries.

The plans are split in their support for the governor’s plan to fund and develop a $2 billion sports and entertainment complex to lure two professional sports teams from Washington, D.C., to Virginia.

The House budget would create the Virginia Sports and Entertainment Authority, a political subdivision tasked with financing bonds to pay for the construction of the sports complex in Alexandria. It additionally includes increased funding for the Washington Metropolitan Area Transit Authority (Metro), which operates transit in and around Washington, D.C.

Youngkin reached a tentative deal in December with the parent company of the NBA’s Washington Wizards and NHL’s Washington Capitals to move those teams from the nation’s capital to Northern Virginia. But the plan needs funding to develop a sports and entertainment complex.

The Senate proposal would not create the sports and entertainment authority, or provide any funding for Metro — showing Sen. Louise Lucas, chair of the Senate Finance and Appropriations Committee, is ready to play hardball with the governor.

“We cannot continue to dump money into Metro,” Lucas, D-Portsmouth, told a gaggle of reporters on Sunday. “This year I decided not to put a dime in there.”

Metro announced in December that it is facing a projected $750 million deficit and needs increased support from Virginia, Maryland and Washington, D.C. Many legislators from Northern Virginia subsequently said they will not consider Youngkin’s stadium proposal unless Metro receives more money.

The lack of support from Lucas didn’t come as a surprise. The senator used her position as chair last week to stonewall a Senate bill that would have created the sports authority, and said she believed there were too many “unanswered questions and potential conflicts of interest.”

Lucas opened Sunday’s committee meeting on a similar fiery note.

“(I am) unafraid to stand up to anyone when I believe that what is being proposed is not in the best interest of the commonwealth,” she said. “I will not compromise when it endangers the commonwealth’s future.”

The Senate proposal would also authorize $92 million toward increased toll relief for Portsmouth and Norfolk residents.

Lucas told The Virginian-Pilot she believes it’s a crucial issue for Hampton Roads’ residents.

“They’re going to have those 14 toll-free trips per week, forgiveness of individual toll debt pursuant to a successful negotiation and the ability to receive a no cost transponder,” she said, noting relief would be targeted to those making less than $50,000. “I am going to be here for four years working on this so I’m going to eat this elephant bite by bite.”

Youngkin’s initial budget proposal called for a 12% cut to income taxes across all income brackets and an increase in the state sales tax from 4.3% to 5.2%. Those tax changes were not included in either the House or Senate plan. But both chambers were on board with his recent call to expand the state’s sales and use tax base to include digital goods.

In his opening remarks, House Appropriations Committee Chairman Luke Torian said it was a logical change.

“The governor was correct,” said Torian, D-Dumfries. “It makes no sense to pay sales tax when you buy a Blu-ray disc, but don’t pay a tax when you download the same movie from a digital retailer.”

The House and Senate plans redirected the proposed $1 billion in income tax cuts back into other spending priorities, including public education. The Senate plan would increase spending on schools by $1.6 billion over two years, including $402 million to provide a 3% annual salary increase for teachers.

“People of my generation, Black and white alike, were unable to attend school during Massive Resistance and I want to make sure that no child is ever denied the ability to have a quality public education,” Lucas said during the committee meeting.

The House plan includes a slightly larger pay boost for teachers, a 3.37% annual raise, costing $628 million over two years.

Each plan would also boost state worker salaries, the Senate plan by 2.5% and the House plan by 3%.

The two budget proposals will serve as a starting point for negotiations — much of which will take place behind closed doors. The two chambers will eventually meld their budget proposals together, and then send it to the governor’s desk for approval.

In recent years, state budget negotiations have often outlasted the legislative session and even stretched into the summer.

“Today is just the start, and I am confident that working together with the General Assembly we can continue the progress we’ve made in our first two years and move the Commonwealth forward together,” Youngkin said in a Sunday statement.